Citi creates a financial bridge between Walmart and its suppliers

The American bank Citi has just announced the official launch of a financing platform dedicated to Walmart suppliers. Bridge built by Citi offers a wide range of financing options to small and medium-sized businesses that have a commercial relationship with Walmart. After a pilot phase lasting more than a year, the bank is now implementing its Banking-as-a-Service strategy by providing the infrastructure for this platform to act as an intermediary between Walmart, its suppliers and small American lenders.

FACTS

• This is the official launch of a platform born in 2021. Bridge built by Citi is the technology platform designed by Citi to connect U.S. small and medium-sized businesses with local lending institutions. This infrastructure was used as the basis for a Walmart branded version for its suppliers.

• The platform currently brings together 70 lenders, of which 20 are Minority Depository Institutions (MDIs), i.e. institutions owned by minority founders or serving a minority.

• It is aimed at the 10,000 small and medium-sized businesses that have a business relationship with Walmart in the United States. They are eligible for loans of up to $10 million in a variety of forms, including commercial real estate loans, cash advances, factoring and term loans.

• Eligibility : U.S. business with more than $100,000 in revenue per year.

• Background :

  • Walmart supplier seeking a loan determines the amount requested and completes a form describing their need;

  • the specifications are then shared with the platform's lenders, based on the financial products they offer;

  • the interested lenders position themselves by proposing an offer;

  • the supplier can then compare and choose the offer that suits him.

CHALLENGES

• For Walmart, it is a question of enriching the financial services offered to its partners, while benefiting from the financial guarantee represented by the Citi brand. Indeed, Walmart only offers limited payment options to its suppliers. Walmart's ambition is to broaden this offer to build loyalty while supporting their financial health.

• For Citi, it is first of all a way to quickly expand the target of its Bridge platform, by addressing nearly 10,000 additional customers, without any commercial effort; while benefiting from Walmart's customer knowledge, which offers a simplified loan application process.

• But above all, it is a strong signal of the bank's new positioning, which sees itself as a technological intermediary between lenders and customers. This launch implies a strategic path that the bank has already taken by gradually opening up its infrastructures. This was, for example, the meaning of the mobile application launched in 2018 open to both Citibank customers and non-customers, with the perspective of being an aggregator more than a bank.

MARKET PERSPECTIVE

• When it launched in 2021, Bridge built by City had 18 lenders, up from more than 70 today. Since then, Bridge has recorded $700 million in outstanding loans, with average loan amounts of $1.1 million.

• Walmart, for its part, is adding to an offering that already relies heavily on partnerships. For example, Walmart Marketplace, its offering for merchants in its marketplace, provides cash advances. On the BtoC side, Walmart is working with Affirm to offer point-of-sale payment facilities.

• Another American bank has begun to explore this Banking-as-a-Service approach: Standard Chartered, under the nexus brand, offers white-label payment, loan and savings solutions to Indonesian companies, particularly in e-commerce (with clients such as Bukalapak and Sociolla).